The "double-pass acquisition" that has been raging has a new story. Let's take a look at the related content with the mobile phone portable Xiaobian.
On the evening of March 7, in order to dispel the concerns of US regulators, Broadcom said it plans to invest $1.5 billion to train US engineers in order to lead the US to the global 5G market. Broadcom’s move aims to dispel the concerns of the US Treasury and win the acquisition of Qualcomm.
On March 6, local time, Qualcomm announced a letter from the US Foreign Investment Committee (CFIUS) to Qualcomm explaining why it blocked Broadcom's acquisition of Qualcomm. According to the US Treasury Department, based on historical records, Broadcom usually cuts off its investment after acquiring a company, which will pose a threat to US national security. The US Treasury Department also mentioned Huawei in the letter, saying that Huawei is actively participating in the formulation of the 5G standard. If Qualcomm's "leadership role" in the 5G market is replaced by Huawei, it may pose a threat to the United States.
Among the top players in the 5G world, Qualcomm and Huawei are the two most important participating teams. According to calculations by wireless technology company InterDigital Inc., 34% of the 5G standard proposal submissions came from Chinese companies last year, and China is the country with the most submissions. Among them, Huawei ranked first with 234 programs, Qualcomm was the most active among US companies, and submitted 168 programs; Intel Corporation (Intel Co., INTC) ranked behind with 103 programs.
At present, Huawei has not responded to the above news, but Yu Chengdong, CEO of Huawei's consumer business at MWC a few days ago, said that Huawei's mobile phone entering the US market was blocked because competitors were afraid of Huawei's advantage. An official spokesperson for the Huawei Group said that Huawei will remain open and transparent in the US market.
At the time of the original Qualcomm's annual shareholder meeting, only 48 hours left, the US Treasury Department suddenly said that the US Foreign Investment Committee (CFIUS) has issued an interim order, ordering Qualcomm to postpone the meeting for 30 days, to "acquire for Broadcom. Qualcomm's proposal to conduct a comprehensive investigation." Qualcomm told the First Financial and Economics reporter that the time of the shareholders' meeting has been postponed until April 5.
CFIUS also detailed the concerns of the department in a letter, and Qualcomm disclosed the letter.
“One of the biggest concerns of the US government is that Qualcomm is the global leader in the innovation and development of the telecommunications industry, and the above transactions may weaken its position.†CFIUS wrote in the letter, especially in Broadcom’s use of “private equity investment†acquisitions. In the case of Qualcomm, this situation may lead to a reduction in R&D investment due to pressure to focus on short-term profitability.
CFIUS believes that Qualcomm's leadership in the development of science and technology is conducive to national security. Qualcomm is well known and trusted by the US government, and a well-known and trusted company such as Qualcomm plays a leading role in the US telecommunications infrastructure, which will give people great confidence in the integrity of such infrastructure involving national security. The committee believes that the weakening of Qualcomm's role will likely give China, especially China's telecom equipment manufacturer, Huawei Technologies Co., Ltd. a chance. Huawei is also a powerful force in the 5G field.
After the CFIUS letter was announced, Broadcom immediately said it plans to invest $1.5 billion to train US engineers in order to lead the US to the global 5G market. Broadcom’s move aims to dispel the concerns of the US Treasury and win the acquisition of Qualcomm.
During the MWC interview, a Huawei insider who did not want to be named told reporters that Huawei is also internally evaluating the impact of Huawei and Qualcomm on Huawei. "Qualcomm and Broadcom have always been the top five large semiconductor companies in the world. Not only that, they are the world's top two mobile Internet processor companies and the underlying patent hegemony in the communications field and the world's largest Internet of Things chip company." The source told reporters that More than just 5G, in many technologies, including wireless technology, communication baseband, semiconductor circuit design, wireless storage, etc., both companies have applied for a large number of patented technologies, which are enough for the two companies to pull in the field of communication technology. To be the first, the integration will have a more advanced and monopolistic technological advantage.
CFIUS intervention is just an episode"During the investigation, Qualcomm needs to win the support of at least one CFIUS official to use the one-vote veto, thus affecting the final negotiation results." Canaly analyst Jamou told reporters in a previous interview.
However, from the scope of the investigation published by CFIUS and the "counterattack" of Broadcom, Qualcomm may only have a time advantage this time.
In fact, for the issue of the weakening of the US 5G advantage mentioned by CFIUS, patent analysis agencies have given the best explanation from the perspective of patents.
According to the report of Smart Bud, in the past integration, the usual practice is to abandon the bad business with high cost and stagnant development, and then expand its technical strength and business scope through continuous acquisition, from basic network equipment to wearable. As well as writing equipment, and then to the cloud construction and artificial intelligence server construction links, each of Broadcom's business is on the contemporary boom, and the future 5G is clearly the focus of Broadcom's layout.
Yao Jiayang, an analyst at the Tuoba Industrial Research Institute, a semiconductor research institute, agrees with the above point of view. "While the mergers and acquisitions and the proportion of revenue categories, the communication infrastructure can be said to be a very important lifeline for Botong, and the top 20 of NXP. Five of the customers are communication infrastructure builders."
Yao Jiayang told reporters that it is highly likely that Broadcom will aim to complete the acquisition of NXP’s “New Qualcommâ€. Qualcomm itself is a global leader in wireless communications. Upon completion of NXP's acquisition, it will become the world's most complete supplier of automotive semiconductor solutions. Considering that the automotive electronics market will continue to have certain growth momentum, plus Broadcom. It is also the main chip supplier for the car's Ethernet network. The acquisition of Qualcomm will bring considerable benefits to Broadcom.
From this point of view, the “Citong’s use of private equity investment to acquire Qualcomm in the CFIUS letter may lead to a reduction in R&D investment, because the pressure to focus on short-term profitability†seems to be somewhat weak, and let Huawei “ The back pot is even more funny.
The mergers and acquisitions of Qualcomm and Broadcom have now entered the final "climax". After experiencing multiple confrontations such as capital confrontation and seeking official support, both sides appear to be somewhat exhausted. In any case, as the largest M&A case in the history of semiconductors, Every step of the case is worthy of outside attention, especially on the eve of the 5G window, who can become the leader of the next generation of technology leadership affects the entire semiconductor industry.
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